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Graduate tax to replace tuition fees

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In a speech at London South Bank University today, Business Secretary is expected to an announce a new 'graduate tax' to replace tuition fees at state-funded universities.

As things stand, some universities may charge students up to £3,225 a year in tuition fees. The fees become repayable after graduation, as soon as the borrower starts earning over £15,000.

The graduate tax, as the name implies, would also be payable after a student obtains a degree. However, a graduate would have to start paying it much sooner -- i.e., on any income earned above the (currently set at £6,475 per annum) -- and may potentially have to continue paying it over the duration of his or her working life.

The University and College Union, which represents lecturers, has railed against any "rebranding exercise" that increases the financial burden on students. Its general secretary, Sally Hunt, said:

"If the government thinks it can get the public to swallow higher fees as some sort of graduate tax it is living in a dream world. We need a proper debate on how to fund our universities, not an exercise in rebranding.

"We will judge the plans on what they actually do and whether or not students will be forced to pay more, not how the government markets them."

Hunt is also concerned about government plans to introduce two-year degrees:

"They may sound great on paper but are in effect education on the cheap. They would be incredibly teacher-intensive and would stop staff from carrying out vital research and pastoral duties. Our universities are places of learning, not academic sweatshops, and we need to get away from the idea that more can be delivered for less."

The National Union of Students are also opposed to a graduate tax. They feel it would "fail to reflect the diminishing value of education compared to the growing importance of work experience to a career". Moreover, NUS believe many students would end up overpaying for the cost of their education.

On top of these concerns, there is no guarantee that graduate tax receipts would be ring-fenced for higher education.

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